Restructure Your Debts And Rebuild Your Financial Freedom

The only recourse left to you is to file for bankruptcy, but you don’t want to let go of your dream house and furniture or other assets that you have worked so hard to build. The law gives you an option. That option is a chapter 13 bankruptcy filing, a chapter 13 bankruptcy might seem long drawn and unwieldy, but there are many advantages when you file for a chapter 13 bankruptcy. It might also be the only recourse left for you to consider as the law is stringent on the means test.

The Circumstances of Filing for a Chapter 13 Bankruptcy

The means test is a way to determine whether you earn more than the stipulated amount to file for a Chapter 7 bankruptcy. For example if you earn more than median income of an average family in your state then you can only try for Chapter 13 bankruptcy. The other reason why you can file for a chapter 13 bankruptcies is when your disposable income is large enough to pay your debts towards unsecured creditors up to $10,950 in the course of consecutive 5 years.

Advantages of Filing for Chapter 13 Bankruptcy

There are many inherent advantages of filing for a bankruptcy.

The filing once approved has the power to stop the foreclosure on the home you have worked hard to build. The bankruptcy allows you to catch up on late or missed payments for up to 5 years in a repayment restructuring plan. The base of a bankruptcy filing is the fact that you are allowed to pay for a sustained period of time without any harassment from your creditors. The foreclosure is kept at bay as long as you can keep the payments going on your restructured plan.

The second mortgage becomes history with the bankruptcy restructure. The second mortgage is redundant if your home is equal in value or even less than the value of the first mortgage. In this scenario the second mortgage is turned into an unsecured loan. And, notably, in this case the unsecured loan is not needed to be paid in full. It may also lower the amount that you need to pay for your house and your second mortgage is discharged in one shot.

Filing a Chapter 13 bankruptcy can actually do you a lot of good in the long run!